Prosecutor rejects Real Housewives' Teresa Giudice plea deal that would have kept her out of jail in financial fraud case

She and her husband Joe Giudice face up to 50 years in prison for financial fraud.

But Teresa Giudice's attempt to avoid jail time if convicted has stalled.

The 41-year-old and her husband Joe's defense team submitted a plea deal on Wednesday but the prosecutor in their financial fraud case denied it, according to RadarOnline.

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Rejected: The prosecutor in Joe and Teresa Giudice's financial fraud case dismissed the couple's plea deal, which would have meant no jail time for Teresa, pictured making their way to the courthouse on Wednesday in Newark, New Jersey

'Teresa wanted a plea deal that keeps her out of jail so she offered to do anything else but jail time and have Joe serve all of the time in jail. The prosecutor dismissed the deal outright,' a source told the website.

The Real Housewives Of New Jersey star and her husband pleaded not guilty on Wednesday to a host of federal fraud charges at a Newark, New Jersey courthouse.

The Giudices were charged last month in a
39-count indictment with conspiracy to commit mail and wire fraud, bank
fraud, making false statements on loan applications and bankruptcy
fraud.

'The prosecutor has said that if she wants to plead it out she has to do jail time,' the source said.

'They believe that the evidence will show that Teresa can’t play dumb. She was in cahoots with Joe and was just as much a part of orchestrating the scam as he was.'

Stylish
no matter what: The 41-year-old made sure to look stylish in a cream
business suit and her hair in a slick bun as the pair made their way to
the courthouse

The prosecutor is looking for jail time for both Teresa and Joe, despite the fact that they have four young children.

'They are pushing for time for both of them.

'They’re going to paint a completely different picture of Teresa and believe that they can show that she was just as involved as Joe in creating the fraud.'

The pair made their pleas in U.S. District Court after passing through a gauntlet of news media outside the courthouse. Neither spoke during the five-minute court proceeding, and their pleas were entered by their respective attorneys.

Pushing for jail time: The source said the prosecutor will push to show that Teresa was as involved as Joe in creating the fraud

U.S. District Judge Esther Salas set a trial date of October 8.

The couple is accused of exaggerating their income while applying for loans before their show debuted in 2009, then hiding their fortunes in a bankruptcy filing after their first season aired.

They are also accused of submitting fraudulent mortgage and loan applications and fabricating tax returns and W2 forms.

Doing time: The couple face up to 50 years in prison and millions of dollars in penalties in a 39-count indictment with conspiracy to commit fraud

Both face hundreds of years in prison and millions of dollars in fines if convicted and given consecutive sentences, but federal sentencing guidelines would likely greatly reduce the penalties.

The couple filed for bankruptcy in 2009, claiming they owed $11 million, including $2.2 million in mortgages, $13,000 to Neiman Marcus and Nordstrom, and nearly $12,000 to a fertility clinic.

Joe also is facing charges in Passaic County that he used his brother's identity to obtain a driver's license, presenting his marriage and birth certificates. He rejected a plea deal in April through his lawyer, Miles Feinstein.

'Doing fine': The couple's attorney said the couple and their four daughters are 'handling themselves with great dignity', pictured together in March in New Jersey

Teresa has parlayed her fame into cookbooks, a line of ready-made bellinis and Skinny Italian, a specialty food line.

On the show, she is known for her expensive tastes and combative relationship with her brother and sister-in-law. The couple has four children.

Teresa's attorney Henry E. Klingeman spoke with Us Magazine, revealing that the family is 'handling themselves' during this tough time.

'The family is handling themselves with great dignity, but it's very traumatic,' Klingeman revealed.

'And when you have four small girls, it's tough for everybody, including the girls.'